Eric Enge interviews Robert Scoble about social media, search, and more

Robert Scoble is a technical evangelist, writer, and the author of one of technology’s most influential blogs, Scobleizer. In addition to his executive position at PodTech, he also produces ScobleShow, a video show where Robert visits the world’s best technologists, tours cool tech companies, and gets exclusive demos of the latest Web sites and gadgets. Scoble is a lifelong technologist, growing up just blocks from Apple computer and playing in the garage with electronic gadgets. Scoble worked for Fawcette Technical Publications, UserLand Software, NEC and TabletPC before joining Microsoft’s Channel 9 MSDN Video team, producing stories about Microsoft employees and products. He is a popular speaker and co-author of “Naked Conversations: How Blogs Are Changing the Way Businesses Talk with Customers.”

Interview Transcript

Eric Enge: Tons of PR people are always asking you to review their stuff. How do you deal with that demand, and how do you decide what products and services to review?

Robert Scoble: I read a lot of feeds, so I know what is being talked about in the field out there. I use that as a filtering mechanism to judge whether something is real or is interesting to a group of people. That really helps me. If something is not getting talked about, chances are they haven’t really done their homework, or it’s something completely new. Then, I rely on my intuition, usually at that point I am not being asked to review it, I am just being asked to see it, like I saw Spock last week. That’s a product that you can’t use unless you are an insider, because it’s not open to the public yet.

Eric Enge: Yes. Actually I have a Spock account as well. It looks pretty cool.

Robert Scoble: Yes, they are winding it out a little bit, but that’s a good example. I even heard about Spock from my network of friends, before I saw the product. Even then my network warned me that this is a product that I should look at, because they thought it was interesting for me.

That’s the advantage of having a sizeable audience. The audience will bring you stuff and help you without you having to do a lot of work. But, I put out some stuff that probably shouldn’t have been put out, but I am trying to give small companies a chance too, to get their stuff heard. I try to try it out, like Plaxo, I did an interview, I got a demo, and then I tried it out myself, so that I would have something to say about it, whether it lived up to the demo or not.

It’s sometimes easier to do a good demo, and Plaxo gave a really good demo. It all worked great when I was in their office, but when I got it home on my own machines it was really slow, so in the real world usage often times the products can hit walls that they don’t hit on a clean machine at work.

Eric Enge: So, that is one of the big challenges, to identify the things that are going to get a good audience reaction, but it sounds like you have had a good process for figuring that out.

Robert Scoble: Generally, if something is really hot, you are going to see a lot of conversation about it really fast. That’s this new world, where the world is the size of your screen now. If you watch television you really have a good understanding that the entire world fits on your screen. The word of mouth network is hyper efficient, messages can go from friend to friend to friend in a matter of minutes. Especially with things like Twitter and Facebook and Jaiku and Kyte.TV. You can spread news around the world very quickly just on these little micro-blogging platforms.

Eric Enge: I can tell from the reading I have done of your blog that some of the recent favorite things that you have looked at, and the iPhone seems to be on that list.

Robert Scoble: Yeah, oh yeah.

Eric Enge: Are there some other recent favorites?

Robert Scoble: There are two stories in Silicon Valley right now, iPhone and Facebook, but everything seems to swirl around those two products this last month. That will change as new things come out, but Facebook is remarkable, and it is something that I am hearing everybody say “this is one of the most viral platforms that we have seen in years”.

Putting out a music service like they did on Facebook, and getting six million users in two weeks, that’s incredible. I remember ICQ back in 1996 got everybody’s attention by getting sixty-five thousand users in six weeks. So, that shows you how the world has sped up. Back in 1996 getting sixty-five thousand in six weeks was considered remarkable and news worthy and today you have to get six million people in two weeks.

Eric Enge: Our standards are changing.

Robert Scoble: Yes. The world is speeding up. Back in 1996 we didn’t have blogs. We didn’t have the ability to communicate with the world the way we do now. We didn’t have Google, we didn’t have Twitter, and we didn’t have IM.

The tools that we are getting to pass news around the world are becoming better and better, easier to use. Twittervision is a good example. You can just watch one screen and see what people around the world are talking about right now, at this moment of time.

Eric Enge: It’s a real good buzz meter.

Robert Scoble: Well, and a good news meter too. During the Mexico City earthquake a month ago or so, there were seven people in Mexico City on Twitter at the same time. I knew about the earthquake, because I was watching Twittervision, and I saw it there before the USGS website had it reported.

Eric Enge: Right. So, you think the U.S. Geological Survey website would be pretty quick.

Robert Scoble: It was. It was three minutes after the earthquake. I watched it. I started counting the time from the time somebody said “oh my God, we are in a major earthquake” on Twitter to the time I saw it on USGS, and it was an hour before it was CNN.

Eric Enge: One of the notions I am fond of is the notion that we live in the attention challenged generation. So, I am going to invert the way of thinking a little bit from what you said just now. Okay, the world’s information is now available to me online and in real time, how do I cope with it?

Robert Scoble: Yeah. I think the new generation is going to come up with coping strategies. People like me are going to become important, because I am reading seven hundred feeds, which represents more than four thousand blogs or five thousand blogs every night or everyday during a day. That’s thirteen hundred to fifteen hundred news items a day, and I am picking the best sixty to eighty. If you only have five minutes to watch, you are not going to read seven hundred feeds, you are going to read a feed like the one I am generating, which is by the way on my Facebook profile. You are going to watch that and get your news from that, or you are going to watch Techmeme.

Robert Scoble: Yes. Gabe is tweaking his algorithms. You can see a huge difference in my link blog. Techmeme has big city news, profile news, and it’s going to compete with Google news, where my link blog is smaller stuff, stuff that an executive might care about, but that might not be popular enough. It might not be the iPhone – note that right now the iPhone owns the entire page on Techmeme, and it’s pushing out other interesting news. The new Plaxo release, for instance only survives a few hours on Techmeme. So, if you didn’t look at Techmeme in the right minute, on the right day, you would have totally missed the news about Plaxo.

Eric Enge: It seems to me that the social media sites themselves are one of those methods for dealing with the information processing problem.

Robert Scoble: Oh, absolutely. Digg is out there and very popular. StumbleUpon sold for something like $75 million to eBay. That’s a service where the community brings you interesting new stuff. Digg, I am sure will sell for somewhere in that range or more. Facebook already turned down a billion dollar offer from Yahoo, and I think they are going to go for three to six billion dollars to somebody. Or, they are going to just stay private and make money that way.

Eric Enge: Right. But, I don’t think they will make three billion to six billion in earnings while private.

Robert Scoble: I think it’s possible, because MySpace‘s first advertising deal with Google was 1.1 billion dollars. So, it’s very possible that they could bring in some significant revenues through advertising deals. Certainly, if you look at my network, my network has a lot of influential people. People that, tech executives want to get in front of, and will pay a lot of money to get in front of. So, yeah there is something to the fact that they have really a great audience, and it started with the college kids, which is a great audience to have for advertising. All the consumer companies want to be in front of college kids.

If you can get a college kid to choose Kraft products, they are probably going to stay with that brand their entire life. And, what does that mean in terms of economic power? If the product is toothpaste, and you figure you spend five dollars on a tube of toothpaste a month, it adds up over a lifetime. They are willing to spend forty dollars to acquire somebody as a customer.

Eric Enge: That makes lot of sense. What are your favorite social media sites right now? You have mentioned Twitter and Facebook.

Robert Scoble: Yeah. Facebook is certainly the one to watch right now. Their new application platform has made it killer viral, and it is the one to be on right now. Twitter is one that I like, a lot of my friends are on it and it’s different than Facebook in that all it does is send messages, where Facebook is more like a replacement for your portal or your start page. And, in fact you can put a Twitter message box on your Facebook profile, so you can see how these things start meshing together. And, Jaiku is the same way, and I have my Google feeds on my Facebook page, and I have other things on my Facebook page that came from other places on the internet. So, they are little bit different.

Twitter is really great for telling your friends what you are doing. And, you get a hundred and forty characters, because it’s designed to be used with a cell-phone or your web browser. And then, there is whole suite of services that are building on top of Twitter, like TwitterVision and Twitter Search, and there is now a way to email to Twitter. There is list of fifty to sixty services that are built on the Twitter API.

Eric Enge: I interviewed Seth Godin a couple of weeks ago. One of things that Seth said, when we were talking about Google was “shame on Google for not inventing Twitter, and for taking their eye off the ball and building another server farm instead of building Twitter, which would have taken them three days”.

Robert Scoble: Well, this is the problem with big companies. Big companies don’t get small things, and they don’t get them, and here’s why, and Seth probably would appreciate this. It’s that old question, would you rather have a hundred grand today, or would you rather have a penny that doubles everyday for a month. Intuitively most people, if you ask someone on the street would probably say “I will take the hundred grand. But, if you actually look the math behind the penny doubling, it ends up I think being around 5.5 million dollars.

So, if you are smart take the penny, but the penny only works if you live something like twenty-five days. If you can’t stay alive for twenty-five days and you know you are going to die on of before the twenty-fifth day, take the hundred grand and go have a party.

Eric Enge: Yeah, and enjoy yourself.

Robert Scoble: Well, and this is the reason that big companies don’t get small things, because when the penny goes from a penny to two pennies, to four pennies, to eight pennies, it’s pretty small and pretty boring. And, in most companies, most people don’t know how to deal with that, and they don’t know that it’s going to keep going. For example, I asked Bill Gates to buy Flickr before Yahoo did, and the answer that I got back from the executive staff was an email, really long that had the word business repeated thirteen times. In other words, they are running four billion dollar a year businesses, and I am telling them to pay attention to something that didn’t yet have a value on it, and eventually sold for thirty million dollars. Today it looks like a brilliant buy, but by then it wasn’t big enough, it wasn’t doubling fast enough, and it wasn’t big enough for them to even pay attention to, because they were paying attention to a business that had much more value then that. And, the same thing is true of Google today, right, where is the money? The money is in search, and in AdSense. They can’t even pay attention to a littler stuff, and much less tiny stuff like Twitter. Twitter has like two hundred thousand or maybe five hundred thousand people on it now, it’s still too small of an idea for a big company to understand, and really groom, and spend the resources on, and make sure everybody pays attention to it. So, if you are inside Google’s executive team right now, you have bigger fights to fight.

You have to figure out an advertising strategy for YouTube, which you just spent 1.65 billion dollars on. So, you are telling all your top coders, you figure this out. And, forget about this some little Twitter thing. Actually they bought Dodgeball. Dodgeball was a similar service to Twitter and was into the same kind of market, with the same kind of user model. But, the guys who started Dodgeball didn’t quite nail it, so the second person into the market had the advantage of studying what Dodgeball did, and improving it. Therefore they get the market, they get the hype and they get the usage.

Eric Enge: Right. It’s not always that easy to figure out what exactly is the right mix to make something go viral?

Robert Scoble: Absolutely. Yeah, often times the second guy into the market does better than the first and this is certainly a good example of that.

Eric Enge: Right. So, are there bad parts in your view in a social media world?

Robert Scoble: If you talk to Andrew Keen who wrote Cult of the Amateur, he thinks there are a whole bunch of bad parts. He does have some points that are pretty interesting, but he just wraps it in a polemic that doesn’t look at the issue fairly or with any academic vigor. So, I don’t like the book, but it points out that the web has a lot of noise on it, and real experts can’t get found, and in fact just look at my name, do a Google search for Robert. I am the number one Robert in the world according to Google. Am I really the number one Robert in the world? Am I more important to the world than Robert Kennedy or Robert De Niro or Robert Redford? No, but because the web has linked to me more than it has linked to Robert Kennedy or Robert De Niro, I am more important to the web.

You can see that affect in a number of different areas, where people have gotten high on Google rankings or they figure it out how to get their point of view on to Wikipedia for instance, or other blogs. And, they are changing the culture, because they are able to aggregate attention, where other people aren’t able to do that. And, the web rewards people who can aggregate attention.

Eric Enge: Right. A couple of things stand out to me. One is, you can’t vote on truth.

Robert Scoble: Right.

Eric Enge: You can vote on things, but you can’t vote on truth.

Robert Scoble: Yeah.

Eric Enge: There certainly are things you can vote on, like “what’s the best Italian restaurant in Seattle?

Robert Scoble: There are also topics where there is disagreement on whether it’s truth, for example, creationism or evolution? If you talk to s scientist and somebody has rational thought, they are going to say evolution, and they are going to have a pretty well thought out argument for it. But, there are a lot of people particularly in America, who don’t accept rational thought and educated thought, and will take what their religious leaders say to them, or what their parents said to them, or what their culture is saying to them.

Therefore, what is truth, if you can’t even decide how to arrive at truth, as a culture, then it’s going to be a real problem. You are going to see these as frictions between two points of view, and I don’t know how to solve that. The old way was to have an Ivory Tower Academic Institution, where you had to prove the value of your ideas, and you even got to rise up through the academic world. And, you had to publish papers that were approved by other experts, and now that everybody gets to vote on Digg, does the academic expert get noticed any more. I don’t know. That will be an interesting thing to watch.

Eric Enge: It get backs to the role you were talking about yourself playing and it actually reminds me of one of the interviews I did with Gary Price over at Ask. Gary is obviously extremely well-known as a champion of the librarian, and we talked about this notion of the demand for information professional. These are people who can be experts in directing you to the real authoritative information. The idea is that experts can give you a quick way to find your way to the things you need to get on the web.

Robert Scoble: That’s pretty astute, so I certainly see the rise of certain class of bloggers as evidence that there is a need for new kinds of information sifters and new information generators. Certainly now, we can transmit ideas without convincing a committee to do it, and that’s a huge change from twenty years ago. I can transmit video now on things like kyte.TV or Ustream.TV without having a committee involved, and I can distribute my ideas to the world in a new way that I could never have done twenty years ago.

Imagine if I could afford a $60,000 video camera in the 1980’s, and I would go into some TV network, and try to convince them to put my video on. Unless it was something popular I would have no chance, because the amount of distribution was very limited, CNN only has 24-hours in a day, and 20% of that is taken up by advertising. So, you are not going to convince then to put an hour long thing about some new device or whatever. Now the world is completely open on YouTube for all sorts of weird stuff that would never get on CNN.

Eric Enge: Right. But, with CNN the challenge is, they have an audience with a very broad demographic.

Robert Scoble: Exactly.

Eric Enge: And, they are trying to serve the whole audience, where on YouTube you put something out and the audience finds you.

Robert Scoble: Yes. That’s a huge shift, because in the 1980’s there was only CNN or the Cable News Networks or NBC or ABC. There was no other way to get video out to other people. So, we were stuck with what the committee had decided that they would put on air for us. Now, we are no longer stuck with that committee, and you are seeing audiences watch television less, and move more on to the web, because there is more interesting content on the web. If you care about something deeply, like you want to learn Ruby on Rails, you go to YouTube and say Ruby on Rails tutorial, and there is a bunch of stuff up there. That stuff would never have gotten to you via CNN or Fox News.

Eric Enge: Right. So people who are just trying to promote themselves, or just simply are passionate about a topic, like teaching Ruby on Rails, will put it out there. Of course the challenge is, as we talked about before, well is it accurate?

Robert Scoble: You can figure that out pretty quickly, and particularly with the stuff like a compiler. Ruby on Rails, if the video isn’t accurate, you will get an error message on your compiler. It will say it doesn’t work, and then you’ll write the guy who did the video and go what the hell.

Now, about other stuff, now the real challenge for today’s media producer is getting attention. And so, if you can get attention and not be accurate, then that’s pretty cool. But, I think you are going to be a lot more successful by getting attention if you are accurate, and if you do have a credible product. And, if you do your homework, and if it matches what other people find when they listen to you, and match it to their own experiences, you can do very well.

Eric Enge: Right. So, let shift gears a little bit and talk about some search related stuff. Is there a potential negative tipping point for Google?

Robert Scoble: I don’t see it. First of all when you are inside their data center and you see just how many machines they have, and how well managed they are, and how well designed they are, and how cheap they are compared to other company’s data centers, it’s very impressive, and I don’t see anybody matching that. As a result, if you don’t match the speed of Google, I don’t believe you are going to be able to noticeably break in on their brand name, or their audience, or anything. If you build a competing product, and you start to get really popular, your service is going to fall over, because you are going to get six million visits in two days. If you have something that’s dramatically better than Google, your server is going to fall over and continue falling over until you get the four hundred million dollars you are going to need to buy enough servers and data centers, and all that to compete with Google.

Eric Enge: Even if you have all that money, it’s no small engineering feat to put it together.

Robert Scoble: Absolutely not. Google’s data center is so impressive. After seeing one, I have a completely different view today on how beatable Google is, and I don’t think they are beatable. I think, maybe Microsoft can come in and take a chance. But, you have seen Microsoft, and how many billion dollars they have spent on engineering and data centers, and they are still losing market share.

Microsoft has more money than anybody else, and they are still losing market share. So, I don’t see anything on their horizon that’s going to stop Google. I am sure at some point they are going to turn into today’s Microsoft and become boring and less relevant. But, even Microsoft, even though Google is out there, is still breaking in so much cash. So many people feel like they have to buy Microsoft products, and want to buy them actually. I sit next to people on planes and they say they love Microsoft products. But, you are just not going to see these companies stop for a while. Now, can a company come in and have some fun with Google, absolutely PowerSet and Spock may do very well. Yahoo has Flickr, and Flickr does image search way better than anybody else.

Eric Enge: Well, and Yahoo Answers is really interesting too.

Robert Scoble: Yeah, that’s true, yeah. So, there’s a lot of vertical space out there that could affect Google, and could take some PR away from them or you get some audience size or some system decent size market share. But, I don’t think you go directly at Google and try to beat them, not with their main search engine, not today. I think the strategy that Microsoft has pursued is the wrong one. When I was there, I was arguing that they should build little vertical engines around Google, and surround them and keep them from growing, and then slowly try to take on the main search engine. But, Microsoft management just wants to play on the big pile.

This is again the inability to see small things, I would have taken a ten year approach to getting back into the search game, and if you did that, then you have some chance. But, I don’t see it, and a lot of the smart people who I knew at Microsoft have left and either gone to Google or joined other startups. And so, a lot of their brain power that could have helped them get established is gone, because they were just so frustrated by the strategy.

Eric Enge: I agree. I think it’s the right idea for Microsoft to find those niches where they can dominate, and not worry about the fact that it’s a ten million dollar business right now. It’s about getting foothold and getting mind share. Maybe even build a hundred of those businesses.

Robert Scoble: Yes. And, also to try to find, if you invest in a hundred little search engines, one or two of them might be that magic penny that starts doubling like crazy, and might turn into next year’s big thing, right. And then everybody will say “Microsoft has a great strategy. Microsoft is coming back, look at them, they have something going”.

Eric Enge: Since the days of the ancient Chinese empires, people have understood that direct frontal assault against the fortified position is the worst strategy.

Robert Scoble: Well, they didn’t listen to me, and this is a good lesson, right. How do you get listened to, you have to build a business, but in order to get listened to in this industry, you have to build a business, and prove that you’re able to build something that has value. This is why with Steve Jobs, people clap and cheer, no matter what he says. Because, he has done it in the past, he has built several successful businesses, and he’s gotten to the place where people listen to him. I mean he talked IBM into investing five hundred million dollars to fund Next without even having a prototype done. Unfortunately, Microsoft doesn’t have people like that, who have past business success, and who can get things going like that, so.

Eric Enge: Isn’t it possible though that Google could essentially just blow it from a PR perspective somehow?

Robert Scoble: They have blown it all over the place already. I mean look at the Microsoft PR problems. Do they really care whether they had good PR or not, I don’t know. What matters is; do you have the product that people want? Google has it right now, they can make PR mistake after PR mistake, and that won’t change.

Eric Enge: With Google, people believe that they are going to get the answer they need faster than anywhere else. That’s my problem regardless of what I think about them.

Robert Scoble: Yes, and I don’t see anybody being able to change that.

Eric Enge: It’s not sufficient for people to simply catch up to Google. They have to create it enough differentiation that it’s worth switching. It’s not good enough just to be equal to Google, you have to be 30% better or 50 % better, to attract enough attention.

Robert Scoble: You have to be able to do twenty searches and demonstrate that every single one of them is better. And, right now there isn’t anybody who even does more than two or three better, and that really isn’t going to fly anyways.

Eric Enge: What do you think about the personalization and universal search initiatives from Google?

Robert Scoble: Universal search is real interesting; they are starting to run away from the pack by putting more things into search. So, when you search for Martin Luther King now, you see a video of his “I have a dream” that was taken off of YouTube. This is what companies do, right, and Google for a long time looked really chaotic, and looked like they didn’t have a strategy. They had a hundred teams going in a hundred different directions, and they were buying things like YouTube, and people wondered what the hell were they doing with that? But, now they start integrating them together into their main product, and you can see that it was brilliant. And, that’s how they’re going to expand the audiences, because normal everyday people who aren’t passionate about computers, they understand only one thing about the computer today, and it’s that search box.

They don’t understand how to do Google image searches, or how to go to Picasa, or how to use anything but that search box on the top of their browser. That’s what normal everyday people know. I watch them at the airport, so that’s what they understand, like one of the top search terms than Google is Yahoo, right. Because, people don’t even know that you can go to the address bar and type Yahoo.com and go off to Yahoo. Instead they go to Google and type Yahoo in the search box, because they wanted to go to Yahoo. Okay, I don’t fight with human behavior, I just study it.

So, universal search is brilliant from that standpoint, because it adds more stuff into that search box, and therefore brings more of the Google family of services into the experience of searching.

Eric Enge: Right. I speculated that, that would actually cause an increase in image and video search for Google, because, it would be exposing those services more.

Robert Scoble: Absolutely. If you want to see Martin Luther King’s I have a dream speech, you could search Martin Luther King on YouTube now, or you could do it on Google. I would rather just deal with it in the search box, because that’s built into my browser. Why do I need to go to fifteen different places to do different searches?

This is why the Flickr integration into Yahoo’s search engine is brilliant, because that will make Yahoo’s image search better. It’ll be one thing at least, that I can point to the world that they should go to Yahoo for this. The problem is Yahoo needs five of those, not just one. So far they have the same problem that Microsoft does.

As for personalization, Google is collecting almost as much information as Facebook is. In fact, what would be really scary is if Google buys Facebook. Every time Google buys something now, or builds something, for instance like the new Street View feature of Google Maps, where they have a truck going around with a video camera, people saw that and it’s a really cool feature, but then they start realizing “oh, wait a second, Google’s cameras see into my house”.

Now, all my friends can check out my draperies.

Eric Enge: Or the fact they didn’t clean up today or whatever.

Robert Scoble: There are whole blogs that show off embarrassing moments caught by the Google truck. It’s pretty interesting, but it freaks people out. A lot of people on mainstream talk radio are talking about how it freaked them out, but often they saw that Google was collecting information on them in almost a big brother type way. And, that was the first time it clicked for a lot a people that “oh, these companies are actually collecting a lot of information on you”. And, if they keep buying these different companies, they can aggregate a huge data base about you and figure out really a lot about you. Imagine if Google bought Safeway. Safeway is building a data base of everything I buy, they know whether I buy diapers or meat, or doughnuts.

If you access to a database like that, you can start making assumptions about the kind of person you are and what your lifestyle is going to be. And, if you’re buying behavior changes, for instance in September, my buying behavior will include buying diapers right, for the first time. And, they’ll be able to say “Scoble is buying diapers, and that means he has a kid at home and it’s a newborn, because he just started buying newborn diapers”. You can make some assumptions and 99% of the time, you’re going to be correct, right.

Imagine you are an advertiser now and you know that you can look at a hundred thousand people in my database that just are buying newborn diapers. What can I do with that hundred thousand people, can I send them a message for life insurance, can I tell them oh, when you buy a new stroller, you should buy this model, and you can get a ten dollar discount, if you go over here. If you’re a restaurant chain, and you cater to families who have young screaming kids, you can say hey, we are kids friendly, come over for your first meal, we’ll give you a two for one special or something like that.

Eric Enge: There are a lot more things you can do if you are Google. You might grow on by a company like DoubleClick.

Robert Scoble: Absolutely. Each time Google buys one of these databases, people are going to get freaked out, and figure out “they know a lot more about me, and this is getting scarier and scarier”.

Eric Enge: We talked a little bit earlier about Microsoft. Obviously, they have many billions of dollars of cash reserves, and they generate billions of dollars of free cash flow on an annual basis. Satya Nadella, who is in charge of engineering for the Live Search team says that, they have a reach currently, in live search of fifty-five million people a month, which is an appreciable percentage of Google. Their market share in terms of total searches may only be around 10%, but their share in terms of reach is much higher.

Robert Scoble: Yeah, because people get their Windows Vista, and they sold forty million copies of Windows Vista in the first two month or three months. People get Windows Vista and try the search box out for a little while, and then realize, they are always saying, this isn’t quite as good as Google, and they switch back to Google. I mean there’s no secret to what’s going on here, and where their market share is coming from.

Eric Enge: No, I understand. The question then is, those are some very notable assets, should Google and Yahoo fear Microsoft?

Robert Scoble: Absolutely. You can never write off a company with the kinds of resources that Microsoft has. Microsoft has the resources to build huge data farms with hundreds of thousands of computers in it. And, they have the resources to hire some smart kids who will come up with something interesting, and they have the resources to buy companies. For example, they have the resources to buy Yahoo.

Would they do that? I don’t know, I don’t think so. But, desperation makes very interesting bed fellows. Keep in mind the market share when I left Microsoft a year ago was about 18%, and now its 10%. If they continue losing that kind of market share over the next year, especially given that everybody is getting a new operating system with Windows Vista, and a new browser, they are really in trouble. And, in fact they know they are in trouble, they have fired almost every executive I used to deal with.

If the official press release says he left to spend more time with his family, that means he got fired. Most of the people I used to deal with are gone.

Eric Enge: Right. So, it gets back to the whole problem of, if you really want to create something new and powerful, you have to deal or take the kind of risks that you can’t in a large corporate culture, or is it very difficult to do it in a large corporate culture.

Robert Scoble: Very difficult, because it’s hard to move fast. Even the Start.com was really two people or three people. One really brilliant coder, a good leader, in fact Sanaz Ahari now is supposedly in-charge of some part of the search engine team. And, she was in-charge of the three person or four person team on Start.com, and they were innovating really very fast until I started making them public with my video camera. Then everybody around Microsoft wanted to integrate into Start.com, and that pulls you down, because now you are having meetings to deal with people and you’re not coding.

While you are dealing with all these integration tasks, you slow down your ability to innovate and come out with new features, and keep your customers happy, and listen to your customer’s rather than other people inside Microsoft.

Start.com became the product that is Live.com today. It is also now going to be the official homepage for Windows Vista. Now, you have to think about scale. How are we going to deal with two hundred million people, and overnight, and or in this case forty million, if it’s Windows Vista? How are we going to deal with that overnight, getting that size of audience? A lot of successful startups are really having a hard time with this. For example, the Facebook platform is so viral and they are getting so many users so fast that they’re having real trouble keeping up with the growth of it.

Eric Enge: Should Microsoft buy Facebook?

Robert Scoble: If I had a company with a lot of resources that would be my first purchase to make right now. There isn’t anything like Facebook that’s on the market. MySpace is bigger, it has more users, but it’s a Rupert Murdoch company, so that’s not going to be buyable. And, Facebook actually has a better audience for advertising, and has a better approach to web design. I think more people are going to come on Facebook in the next two years, than are currently on it. So, there is a lot of growth ahead for it, and they have a brilliant young team who is not, where they’re all twenty-two years, twenty-three years old. So, they’ll work themselves to death for you. You give them four years of stock, and they’ll work themselves for you and build something really interesting.

I don’t know, but that’s what I would do, but try to get somebody to spend five billion dollars right now at Microsoft, and you can’t. Most people inside Microsoft wouldn’t understand why they would spend five billion dollars on that. I do, but I was unable to convince them to spend thirty million on Flickr.

Eric Enge: That’s a slightly different scale though.

Robert Scoble: The stakes are going up, and every year you wait, this stuff is just going to get more and more expensive, and eventually it’ll just go IPO. I bet that Facebook could go IPO.

Eric Enge: Well, superb. I think we’ve covered a lot of ground. I think it’s been a really fun and interesting conversation.